Water as an asset class is largely unknown to the retail adviser but Protected Distribution Limited, a T.I.S. Group subsidiary, is trying to change this with the launch of the UK's first protected water fund.
The 100% capital protected fund, if held for the full 10-year period, is provided by Barclays Bank through its new Barclays World Water Strategy index.
The index tracks the performance of the world’s 40 largest publicly-quoted water related stocks, from over 700 available.
Managed by Abacus Financial Services, the fund is domiciled in the Isle of Man, with a 0.75% administration fee and 2% annual management fee. There is also 4% upfront commission and 0.5% renewal.
T.I.S. Group CEO Dan Farrow says water is the “commodity of the future”.
“It is astonishing how much unrealised growth there is in the sector for investors to gain exposure to,” he says.
“Demand for water has increased seven times over the last 100 years, driven mainly by irrigation and agriculture, and will double again by 2050.”
Farrow says an investment in water can be used to increase portfolio diversification.
“These investors can gain exposure to the strong growth potential of the expanding water sector and be assured that at maturity capital is 100% protected by a well respected global bank such as Barclays.”
London Asset Management managing director Gary Pulford says the fund should be considered as a defensive, long-term portfolio addition.
“This is a winning combination – a fund with a 100% capital guarantee that invests in arguably the most essential commodity: water,” he says.
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